If there’s one constant in HR Compliance as it relates to international business, it’s that regulations and legislation applicable today, will be different tomorrow.
HR professionals prepared for these changes will be best positioned to transform them into opportunity. This begins with clear understanding of six key compliance issues companies face as they maintain or expand a global workforce:
New Market Compliance
One of the most common, and costly, mistakes companies make is assuming foreign markets operate exactly as the U.S. Truth is, each territory comes with its own laws regarding employee on-boarding/registering, tax calculations, and more. Stretch this complexity across the globe and your job becomes exponentially more difficult.
Keeping employees paid, on time, is crucial to company moral and productivity. But what about tax deadlines? Withholding and reporting laws? Regulations requiring employee tax slip signatures? Failure to adhere to and keep up with any of these payroll compliance rules can result in serious penalties, significantly affecting your bottom line.
Benefits and Expectations
Few aspects of global employment differ as widely as benefit requirements. For example, while certain levels of benefits are required by law in the U.S., most countries offer more than adequate state-provided health care. Age, gender, paid family leave – each must be carefully factored into your benefit plan on a country-by-country basis – or risk redundant coverage, understaffing, or penalties for non-compliance.
It’s essential to organizational culture that every employee knows they are treated equally and fairly, regardless of the country in which they work. Liability insurance can help accomplish this. But not all countries have a state mandated plan for companies to pay into. Are you prepared for its limitations? Or would setting up your own plan to protect worksites and employees be more advantageous?
Termination Policies and Practices
Termination is part of doing business, wherever you operate. Unlike in the U.S., the only country where “at-will employment” exists, termination rules and regulations around the world are more complex. For example, in many countries, before employees can be legally terminated for performance, the employer must make every attempt to bring performance levels up to required standards. Documentation of process, severance – are all issues with which HR professionals must have intimate knowledge to avoid penalty and loss in productivity.
Retirement and Pension Plans
As the number of GenXers and Baby Boomers planning to exit the workforce continues to rise, so too, does the complexity of pension planning and retirement. Employers with international workforces need to understand fully each country’s regulations as they apply to retirement. What age is mandatory? Is national social insurance part of the equation? Are employee pension contributions voluntary or required by law?
Get started with innovative global products.
Knowing and understanding the key global compliance issues outlined above is a great start toward creating opportunity through better payroll management. Having a partner who has been through it helps, too.
With innovative products like GEO, Safeguard Global enables companies to create opportunity out of global compliance challenges through faster, smarter and more efficient outsourcing.
Download the full thought piece and uncover the compliance challenges that lie ahead for HR by clicking here.